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December 2, 2013updated 29 Apr 2022 12:19pm

BDO global revenues increase 7% with more M&A expected

BDO reported global revenue increase of 7.3% to $6.45bn in the year to 30 September 2013.

The network’s chief executive Martin van Roekel said that half of the growth can be attributed to M&A, but strong organic growth was responsible for the other half.

In the past fiscal year BDO finalised the merger with PKF UK, which added 3,500 people to BDO UK and generated combined revenues of almost £400m; three mergers in the US adding over 200 staff; and deals in Denmark and New Zealand. BDO also reported the benefits of the merger BDO Australia and PKF East Coast in June 2012.

Roekel told the International Accounting Bulletin that, due to some of these deals taking place throughout the past fiscal year, the network is likely to see additional benefits from them in the current financial year as well as a continuation of its M&A strategy.

“Within the next five years, we anticipate that the global consolidation of our profession will gather pace, leaving only two or three substantial mid-tier networks globally. The decisions we have taken in 2013 have put us in a leading position to be among those remaining. Only those with financial reserves will break away and our growth this year creates a platform for a future programme of mergers that we believe will lead the consolidation of the mid-tier and will increase both our revenues and the number of countries in which we have a presence,” he said.

Roekel added that based on the discussion with some PKF firms and other smaller networks “we find that some of their larger and stronger member firms are really struggling servicing their clients in a really global way” and expected to see more of such firms looking for a stronger and bigger network in the future.

Regions EMEA revenues increased by 6.6% in the past fiscal with “outstanding” performance attributed to the Slovak Republic, Armenia and Norway in Europe and Jordan and Qatar in the Middle East.

Revenues from the Americas were also up 6.6% with Latin America revenues increasing 11%.

In Asia-Pacific, revenues were up 4.3%, driven by growth from Indonesia, Singapore and China, according to BDO. Roekel told the IAB the BDO firm in China is very well positioned with a strong client base, “which makes us believe we are able to operate similarly as the Big Four”.

“Looking ahead based on the discussions with the firm and the Ministry of Finance I’m confident growth will continue with some slight decrease in percentages due to the already large size of the firm in China. The interesting thing is that as the growth traditionally came from audit services, we now see a trend of increased growth in tax and advisory services. Such growth is increasing quickly.”

Service line fee splits remained similar to previous years for BDO, with audit and accounting making up 59% of revenues, tax services bringing in 20% and advisory services 21%.

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